Relating to local and state government finances by modifying provisions relating to homestead property tax credits, providing a residential property tax rebate, modifying provisions relating to retirement systems, making appropriations, and including applicability provisions

The amount of the credit for such a homestead is the difference between the actual amount of property taxes otherwise due on the homestead for the applicable fiscal year minus 104 percent of the actual amount of property taxes due on the homestead during the immediately preceding fiscal year, but not less than zero, if the property taxes due on the homestead for both such fiscal years were calculated on an assessed valuation that was not a partial assessment.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.7 inapplicable to this division. The division applies to property taxes due and payable in fiscal years beginning on or after July 1, 2027. DIVISION II —— HOMESTEAD CREDIT AMOUNT.1 provides that the homestead credit fund shall be apportioned each year so as to give a credit against the property tax on each eligible homestead in the state in an amount equal to the actual levy on the first $4,850 of actual value for each homestead. The bill increases the amount of credit so as to give a credit in an amount equal to the actual levy on the first $14,550 of actual value for each homestead. This division applies to property taxes due and payable in fiscal years beginning on or after July 1, 2027. DIVISION III —— ELDERLY ADDITIONAL HOMESTEAD PROPERTY TAX CREDIT. The bill modifies the eligibility for and the calculation of the amount of the additional homestead property tax credit under Code chapter 425, subchapter II, for certain claimants.23(1)(a), but not to exceed $1,000.23(1)(a) as if the claimant were an eligible claimant for a credit under that provision; and (2) the difference between the actual amount of property taxes due on the homestead during the applicable fiscal year minus the actual amount of property taxes due on the homestead based on a full assessment during the first fiscal year for which the claimant filed for a credit calculated under the Code chapter and if the claimant has filed for the credit for each of the subsequent fiscal years after the first credit claimed. The bill modifies the eligibility for the credit under current law available to claimants who have reached the age of with a household income of less than 250 percent of the federal poverty level to include claimants who have reached the age of regardless of income level. Under current law, an amount sufficient to implement the elderly and disabled property tax credit is appropriated annually from the state general fund to the elderly and disabled property tax credit fund. The bill instead appropriates annually an amount sufficient to implement the elderly and disabled property tax credit, as amended in the bill, for claimants years of age or older from the taxpayer relief fund to the elderly and disabled property tax credit fund.17 applies to claims under Code chapter 425, subchapter II, filed on or after January 1, 2027. DIVISION IV —— RESIDENTIAL PROPERTY TAX REBATE. The bill creates a residential rebate program for residential owners and renters. The bill creates a residential rebate fund (fund) under the control of the department of revenue (DOR). For each fiscal year specified in the eligibility period, there is appropriated from the taxpayer relief fund to the DOR to be credited to the fund, an amount sufficient to implement this division of the bill. The bill defines “eligibility period” to mean each fiscal year commencing with the fiscal year beginning July 1, 2026, but before the fiscal year beginning July 1, 2028. The bill specifies a person owning a homestead qualifies to claim a residential rebate in the amount of $1,000 for each fiscal year of the eligibility period the person claimed the homestead credit under Code chapter 425. Only one rebate may be claimed for a particular homestead per fiscal year. The bill specifies a person renting a residence qualifies to claim an annual residential rebate in the amount of $500 if the residence is the person’s primary residence during a fiscal year during the eligibility period. The bill creates a process for persons renting to submit the application for the residential rebate. Not more than two rebates may be claimed for a particular rented residence per fiscal year and not more than one rebate may be claimed per familial household per fiscal year. By January following each fiscal year during the eligibility period, DOR shall make the authorized payment amount of $1,000 or $500, as applicable, to persons who qualify for the rebate. DIVISION V —— RETIREMENT SYSTEMS. Code chapter 411 establishes a municipal police officer and fire fighter retirement system, funded through a combination of contributions from participating cities and such officers and fire fighters who are members of the system. The bill provides that beginning July 1, 2026, that portion of the normal contribution otherwise required to be paid by a participating city employer into the fund shall be paid by the treasurer of state from the general fund of the state. The bill appropriates for the fiscal year beginning July 1, 2026, and for each fiscal year thereafter, from the general fund of the state to the treasurer of state an amount necessary to make all such applicable employer contributions.49C. The bill relates to the definition of “earnable compensation” under the Iowa department of public safety peace officers’ retirement, accident, and disability system (Code chapter 97A) and the statewide fire and police retirement system (Code chapter 411) by including any amount received as overtime compensation in the definition of “earnable compensation”.